By Jim Warren
In North Carolina, couples who separate and cannot settle their property matters on their own are subject to statutes governing equitable distribution of marital property, divisible property, and marital debts.
In order to understand the concept of marital distribution, it’s important to define the concept of marital property. Many people mistakenly believe that all property is marital property, while others think they can keep everything separate during a marriage. Neither, in fact is true.
For the family court’s determination, there are two types of property: marital and separate. Separate property is any property owned before the marriage, as well as gifts and inheritances to one spouse or both, or something acquired in exchange for separate property. Separate property is considered that of each individual spouse and should leave the marriage with its individual owner. There’s one caveat here—if you inherit money, for example, and use it to purchase real estate jointly with your spouse, that formerly separate property (the inheritance) becomes an ownership interest in marital property (and is thus considered in equitable distribution).
All other property acquired during the marriage and owned at the time of the couple’s separation is considered marital property and will be divided and distributed equitably by the court. It’s also interesting to note that if one spouse gives another a gift during the marriage—for example, an expensive piece of jewelry—it is considered marital property.
During the equitable distribution process, the court identifies all of the marital property of the couple and then goes through placing a value on each piece of property (as of the date of separation in the fair market). With that expensive piece of jewelry above, a jewelry appraiser would certify its value. So, too, would real estate appraisers value real esate, and accepted sources like NADA and Kelly Blue Book would be used to value automobiles and the like. All in all, these appraisers would be employed to determine the fair market value of each asset.
Finally, the court mandates the actual distribution of the property. Under North Carolina statute, judges are ordered to distribute property equally—a 50/50 split—unless such distribution could be deemed inequitable. If one spouse is keeping the family home, she may have to remortgage the home to pay out the ex-spouses distributed ownership interest in the property.
If you are considering a separation and subsequent divorce, and you’re concerned about the division of your assets and other financial aspects of these matters, it’s time to get started and know your rights. Call us today at Warren Family Law, where we will give you advice and counsel based on more than three decades of helping Charlotte-area families get through the most trying times of their lives. We will help you move forward to a better future.